Question

To find the accumulated value of an investment of $15,000 for 7 years at an interest rate of 6.5% if the money is a

compounded semiannually, b. compounded quarterly, c. Compounded monthly. What is the accumulated value of the money is compounded semiannually?

Answer 1

A = $23,472.11

Explanation:

First, convert R as a percent to r as a decimal

r = R/100

r = 6.5/100

r = 0.065 rate per year,

Then solve the equation for A

A = P(1 + r/n)nt

A = 15,000.00(1 + 0.065/2)(2)(7)

A = 15,000.00(1 + 0.0325)(14)

A = $23,472.11